The United States Secretary of State has described New Zealand as an "ally" and a close friend.

Prime Minister Helen Clark held discussions with Condoleezza Rice at Government House in Auckland this afternoon.

They discussed the political situation in Zimbabwe and the conflict in Afghanistan.

Helen Clark said the increase in the price of fuel and food was also discussed.

Dr Rice said it had been a full agenda.

"I want to agree and underscore the points that you have made about the state of relations between New Zealand and the United States. I believe that they are in very good shape," Dr Rice said

She said the countries shared common goals and common interests in Afghanistan and in the Pacific.

"We share a desire to see the entire Pacific one in which democracy reigns and therefore the issues in Fiji have been a concern to us," Dr Rice said.

She said she was looking forward to the evening meal and music to be hosted by Helen Clark this evening.

She also made mention of the "spirited match" between the All Blacks and Australia tonight.

Question of China

When the pair were questioned about the safety of athletes in China during the Olympics and China's Human Rights record, Helen Clark said China was aware it would be under the spotlight.

"In our countries we are used to having dissent expressed in a way in which it is peaceful. If it goes over that boundary then there's always a response but you would have noticed today that we conducted our talks amongst the backdrop of a rather noisy crowd," she said.

Helen Clark said Chinese authorities needed to deal with any protests with a "measured response".

Dr Rice agreed and said China should be show-casing not only the Olympics but also "openess and tolerance".

She said security would be tight but should not be used "as a cover to try and deal with dissent".

Protesters

While Dr Rice and Helen Clark met, protesters approached police armed with batons outside Government House to "negotiate with police to arrest Condoleezza Rice".

About 100 protesters braved the pouring rain in Auckland, holding banners bearing the US Secretary of State's photograph and a slogan saying "wanted for war crimes".

They also held a large banner saying "USA a terrorist state".

There were tense moments when the protesters moved a police barricade on Glenfell Place, in Mount Eden, forward.

Police officers stood on the other side of the barricade with hands crossed as protesters shouted "Condoleezza Rice, not very nice" and demanded to speak to a senior police officer to arrest her.

A senior officer was present but did not address protesters, who then moved back to the intersection of Mountain Road and Glenfell Place.

Dr Rice earlier said the relationship between the United States and New Zealand was on a "good footing".

Following a one-hour meeting with Foreign Minister Winston Peters, Dr Rice praised New Zealand's role in nuclear non-proliferation and in Afghanistan.

"I appreciate very much New Zealand's contribution in Bamyan province in Afghanistan. The First Lady has come back with really glowing reports with what New Zealand was doing down there," Dr Rice said.

She also thanked the New Zealand government for their work on returning Fiji to a democracy.

Dr Rice said she would be telling Pacific Forum leaders that the only way for Fiji to return to a democracy was through fair and open elections.

Questioned on the possibility of a Free Trade deal with New Zealand, she said President Bush had signed a record number of agreements.

Dr Rice said she would be returning to the US with news that New Zealand was keen for an agreement but did not commit further.

She was also questioned on the relationship between the two countries, given New Zealand's continued anti-nuclear stance.

"US and New Zealand have moved on. If there are remaining issues to be addressed then we should address them," Dr Rice said.

Mr Peters told the media that while the US had access to New Zealand markets, New Zealand companies did not have the same opportunities but "we will get there one day".

As to shared military training exercises, Dr Rice said that if "issues" remained between the two countries then they should be addressed. She said given the two countries working relationship in Afghanistan and maritime security, the relationship had been strengthened and that all "remaining obstacles" should be examined.

Mr Peters said the discussions had been fruitful.

"Discussions today have been extremely profitable and I think they will be the same again with the Prime Minister this afternoon," Mr Peters said.

Heavy rain forced the cancellation of a powhiri planned for Dr Rice this morning.